Non tax-advantaged share option schemes

Copyright © 2026 LexisNexis
Produced by a Tolley Personal Tax expert
Personal Tax
Guidance

Non tax-advantaged share option schemes

Copyright © 2026 LexisNexis
Produced by a Tolley Personal Tax expert
Personal Tax
Guidance
imgtext

Summary

As with any other discretionary option plan, a non tax-advantaged share option plan involves the granting of a specific number of options to an individual. These options provide that the individual can, at an agreed date or point in time, acquire a given number of shares (the underlying shares) for a fixed price. These share schemes used to be known as ‘unapproved’ share option plans.

Given that there is both no up-front cost to acquiring the options and no requirement for the individual to pay over any monies unless the underlying shares increase in value, there is little risk attached to the receipt of options. As a result, the tax treatment and tax rates applicable will often appear to be very similar to cash bonuses.

Key considerations

Grant of options

The terms of the options need to be set out in a suitable legal document known as ‘the Rules’. The Rules govern all pertinent matters between the company and employee and, given the tax complexities that can occur in such arrangements, a suitable and up

Continue reading the full document
To gain access to additional expert tax guidance, workflow tools, generative tax AI, and tax research, register for a free trial of Tolley+™
TAKE A FREE TRIAL NOW
Powered by Tolley+™
  • 18 Dec 2025 12:01

Home/ Tolley Tax Guidance/ Personal Tax / Additional information supplementary pages

Popular Articles

Personal Tax

Self assessment ― amendments and corrections

Self assessment ― amendments and correctionsOnce a self assessment tax return has been filed, both HMRC and the taxpayer (or the agent) has the right to make changes to the return. There are different time limits depending on whether it is a correction by HMRC or an amendment made by the

14 Jul 2020 13:37 | Produced by Tolley Read more Read more
Owner-Managed Businesses

First year allowances

First year allowancesFirst year allowances (FYAs) are available on the following items:•first-year relief on qualifying new main rate plant and machinery (at 100%, which is described by HMRC as ‘full expensing’) and special rate assets (at 50%) from 1 April 2023 (companies only). These FYAs were

14 Jul 2020 11:41 | Produced by Tolley Read more Read more
tag-icon Autumn Budget 2025
Employment Tax

Income tax paid on behalf of employee

Income tax paid on behalf of employeeIntroductionEmployers may wish to make payments of employment income to an employee / director without the employee suffering a tax or NIC cost on that pay. In other words, the employer wants to pay an amount net of tax and NIC. In some instances, often with

14 Jul 2020 11:58 | Produced by Tolley in association with Paul Tew Read more Read more